姓名：李俊杰
学号：2012400634
Assignment: Cost Modules Essay

Cost management in China has been evolving over the past ten years due to influence by the foreign concepts of management accounting. This can be traced back to year 2001 where increased market openness, reduced government interference, and increased management autonomy were mandatory for China’s accession to the World Trade Organization. This change in market condition has incentivized Chinese firms to improve their management accounting practices. Subsequently, the traditional costing method is also facing a sudden threat by the influx of ABC/M, Target Costing, Responsibility Accounting, etc. Presented with new ideas, this essay will discuss the popular cost management accounting trend in China, specifically the responsibility cost control system. I will also compare the changes in the Chinese management accounting practices and give opinions on the possible future outlook of the cost and management accounting landscape.

According to the research on contemporary management accounting in China by Jason Zezhong Xiao and Rong-Ruey Duh, the most widely used techniques are, cost behavior analysis, cost allocation, responsibility accounting, and cost-volume-profit (CVP) analysis. On the other hand, the lowest levels of adoption are techniques like the activity-based costing/management, kaizen costing, standard costing, and environmental accounting. This result is gathered by providing the firms with 25 management accounting practices and asking them to feedback the extent to which they applied each of the 25 practices in the running of their businesses. Results showed that the responsibility cost control system, together with CVP analysis, are among the most popular ‘new’ practices adopted by Chinese firms since market reformed. Specifically, I will discuss responsibility cost control system using the example of